NEW YORK (Reuters):

CIT Group shares rose nearly six percent yesterday following a note by Canadian Imperial Bank of Commerce (CIBC) World Markets that upgraded the stock and said the consumer and commercial lender's board might be forced to consider takeover offers.

CIT shares were up US$1.96, or 5.8 per cent, at US$36 on the New York Stock Exchange. The stock has fallen from a year highof US$61.59 on February 7, according to Reuters data.

On July 18, CIT said it was exiting the mortgage business and posted a surprise second-quarter loss, becoming the latest lender to bail out of the struggling home loan sector. The company also lowered its earnings outlook for the year.

Yesterday, CIBC upgraded CIT to 'sector outperformer' from 'sector performer' and said tha it believed several negative headline events are on the horizon for CIT, the downside risk looks sufficiently discounted near US$30 a share.

CIT had no immediate comment on the CIBC note.